Gasoline prices on track for a record year of pain at the pump
September 12, 2011
U.S. motorists are on pace to spend $491 billion for gasoline this year, the most ever.
Fuel prices have been rising again because of expensive crude oil and increased exports of gasoline and diesel to other countries. Although gasoline prices may decline for a few weeks after the switch to winter blends, which are less costly to produce than summer blends, our pump-price woes won’t be going away, fuel experts said.
“The 30 days between now and mid-October will be the most hospitable days in the country for dropping prices,” said Tom Kloza, chief oil analyst for the Oil Price Information Service in New Jersey. “But then the drumbeats will start about fears of a second Arab Spring. Demand outside of Europe and the U.S. continues to rise. By spring, Americans will be wrestling with $4 gasoline in a lot of markets.”
At one point this year, retail gasoline prices were rising faster than they were even in 2008, when average prices hit record highs of $4.588 a gallon in California and $4.114 nationally.
The run-up in 2008 was followed by the biggest-ever fuel-price collapse. By the last week of December, 2008, motorists had blissfully returned to the much more affordable prices of early 2005, with a gallon of regular in California selling for an average of just $1.810. Nationwide, the average price was $1.613 a gallon.
As a result, the average price nationwide for all of 2008 ended up only about $3.25 a gallon, according to Kloza. But this year, no collapse in the market is anticipated. The average price for the year is running at about $3.66 a gallon, putting the country on track to pay a record $491 million for gasoline for all of 2011, Kloza projects.